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Non-Tech : AMERITRADE HLD A (NASDAQ:AMTD)
AMTD 0.980-3.0%Jan 30 9:30 AM EST
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To: Gil Gilbertson who wrote (299)7/25/1998 12:22:00 PM
From: smartInvestor  Read Replies (1) of 1848
 
Someone please respond to my specific question regarding splits and float. TIA.

It does not make sense to me that in a split situation, with all else being equal, that liquidity would measurably increase. Gil uses the example of 14.5m shares outstanding and 3m not held by insiders. Before and after the split, only 20% of the company would be floating, therefore having no effect on the scarcity of shares.

Gil also mentions that a company with 200m shares outstanding is much more liquid than a stock with only 15m shares. Although it is likely to be more liquid, and possibly much more, there are likely other factors that contribute more to liquidity than number of shares outstanding (e.g., share price, percent floating, etc.).
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